Mukesh Ambani embarks on mega mission in Indian e-commerce
He announced to set up a $24 billion digital-services holding company to  enter the country's internet shopping space on a mega scale.

NEW DELHI (NVI): Asia’s richest man Mukesh Ambani has embarked on his long-wished-for mission to create an e-commerce giant for India to take on market leaders like Ali Baba, Flipkart and Amazon as he announced to set up a $24 billion digital-services holding company to  enter the country’s internet shopping space on a mega scale.

The Reliance Industries Ltd (RIL) of Mukesh Ambani has approved a proposal to infuse Rs 1.08 lakh crore ($15 billion) into the fully owned subsidiary, which will in turn invest that amount in Reliance Jio Infocomm Ltd, the telecommunications venture of the RIL.

This, besides a series of other capital transfers would make Jio, which already has capital of Rs 65,000 crore, almost debt free by March 2020, an RIL statement said. The holding company will be somewhat akin to Alphabet, which became the holding company for Google and its associated businesses, and will put Reliance Jio’s many digital assets under one single umbrella.

The holding company could easily be the most formidable company in India’s tech space. Reliance has it all, from platforms in Jio and JioGigaFiber, to end-user apps like Jio TV and Jio News. And it has deeper pockets than many of the Indian businesses it will compete with, which have their own offerings in specific verticals — JioTV, for instance, would be directly pitted against Hotstar, and Jio Health Plus will compete with startups like Practo.

 Ambani had told shareholders in August that the new businesses, including retail, are likely to contribute half of Reliance’s earnings in a few years, versus about 32 per cent now.

With the new holding firm, Ambani is also readying the businesses for an initial public offering, which he has vowed to complete within five years. Since Jio’s 4G network rolled out in 2016, the carrier has vaulted to the top in India with more than 35 crore users.

Ambani has also been cobbling a network of partners through acquisitions and stake purchases to build a backbone for his e-commerce plans. “Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners,” Ambani said in a statement. “We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders.”

Reliance Industries will invest the money in the holding company — likely on the lines of Alibaba Group Holdings Ltd and Alphabet Inc — through optionally convertible preference shares. The unit will acquire the parent’s equity investment of Rs 65,000 crore in Jio, according to Reliance Industries.

-nad